Energy is a vital input to all sectors of the economy. As well as supplying the power on which industry and households depend, the production and supply of energy provides employment, investment and export opportunities, all of which contribute substantially to the welfare and standard of living of Australians.

Energy sources are divided into two groups - renewable (energy sources for which the supply is essentially inexhaustible) and non-renewable (energy sources with a finite supply). Renewable energy sources include solar, wind, hydro-electricity, geothermal and biomass. However, most of Australia's energy comes from non-renewable fossil fuel sources, such as oil, natural gas, coal and uranium.

Australia's energy resources are outlined in the initial section of this chapter. Subsequent sections describe the supply and use of energy in Australia, the production of primary energy, international trade in energy products, and provide an analysis of energy use.